ANALYSIS: Chancery Parses ‘Control’ as Musk, SB 21 Appeals Loom

The fate of recent Delaware amendments defining “controlling stockholder,” as well as Elon Musk’s status as a controller, remain to be adjudicated by the state’s high court. Meanwhile, the Court of Chancery is continuing to build on common law precedent and further delineating the requirements for “control.”

In a recent Chancery opinion, the nation’s premier business court held that an investor with a 41% stake in a company lacked the requisite control over a transaction that would necessitate application of the rigorous entire fairness standard.

Chancery is the same court that ruled that Musk was a controlling stockholder of ...